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Trends & Analysis
News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

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GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

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Goldman Sachs shares surge after earnings beat

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Keep an eye on these key S&P 500 levels

Trends & Analysis
News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

News

Goldman Sachs shares surge after earnings beat

News

Keep an eye on these key S&P 500 levels

Gold standard definition

The gold standard was a monetary system in which the value of a country’s currency was backed by a fixed amount of gold. This means that if the gold standard stipulated that one ounce of gold was worth $100, then a country’s currency would be directly tied to the value of gold at that rate.

 

The history of the gold standard

The gold standard was widely used in the nineteenth and twentieth, as many believed that if currencies were linked to gold, it would prevent inflation and promote economic stability. However, it had some major limitations.

One such limitation was the lack of flexibility for countries when it came to conducting monetary policy. With currencies tied to gold, central banks could not easily adjust the money supply in response to changing economic conditions. For example, in times of economic recessions and contractions, governments could not stimulate the economy by adjusting the money supply.

Thus, many countries have abandoned the gold standard since the mid-twentieth century in favour of free floating exchange rates and other monetary systems that allowed for more flexibility.

 

Start trading with ADSS

ADSS offers a range of global markets for traders, with CFD opportunities in indices, commodities, forex, equities and more. We also feature tutorials, how-to guides, and weekly webinars to help you navigate the financial markets and find better trading opportunities. You can start trading and investing online by opening a live trading or demo trading account.

 

See all glossary trading terms


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